Who owns the city?
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Most urban Indians would consider a high-rise residential gated community to be a dream home, but many urban thinkers, such as Saskia Sassen, find this form of architecture deeply problematic. Sassen is a sociologist and professor at New York Columbia University. Her books include the seminal The Global City, published in 1991, where she first coined the term “global city”.
An expert on issues relating to urbanization and labour migration, Sassen’s new book, Expulsions: Brutality and Complexity in the Global Economy examines the connections between land, labour and capital in a dynamic, inter-connected world. Sassen was in Delhi to speak at a London School of Economics’s Urban Age conference in November. She spoke to Mint at the sidelines of the event, and continued the conversation over email. Edited excerpts:
“I can understand why many young, active, well-employed, middle-class individuals and families see these gated communities as something very good—clean, green, new buildings, not overcrowded, protected.
“It reminds me of the big attraction to the suburbs for many middle-class families in the US in the 1960s when the big cities were run down, poor, with many blacks from the South migrating North for jobs. Many white families left. Also India’s cities tend to be very densely populated, and I would say one experiences the city as overwhelmed by the masses of people, cars, bikes, everything,” Sassen says, agreeing that there is consumer demand for gated communities.
The problem with gated communities is that they are just one component of “the sharp growth of ‘direct’ investment into buildings and construction in cities, what I think of as the buying and developing of urban land”, she says. This is a troubling phenomenon for two reasons: first, this kind of investment in cities has a deeply unequal impact on land-use and second, the scale of direct investment in cities is formidable.
The new frontier zone
“We are seeing a systematic transformation in the pattern of land ownership in cities which has deep and significant implications for equity, democracy and rights. The world is moving into the city,” Sassen points out, adding, “In the old imperial period dominated by Western powers, the frontier was at the edge of the empire.
“Today, it is right there in the middle of our large cities, as there are vast mixes of people coming from different regions in a country or from foreign countries. They are also frontier spaces for global corporate capital as it enters foreign countries. A country’s major city or cities are a space where these foreign firms can develop their operations. Thus I see the current growth in the buying of urban land as part of that frontier space.
“But it is a dangerous period for the average, modest, middle-class city resident. Much of the national and foreign investment is going into megaprojects that eliminate urban tissue: the small streets and squares, small blocks, all of it replaced by a huge megaproject that privatizes what was once public space. Our large cities have long been destinations for the poor and the modest-income middle classes. They are beginning to lose their grip on a decent reasonable life in these cities. This could be bad.”
The type of capital entering cities has a direct impact on urban planning and urban form, says Sassen. “The key issue is the shift in ownership mode, from modest or small to large and expensive, and from modest public properties to expensive private ones. Examples of scale-ups in private ownership are Gurgaon in Delhi, Santa Fe in Mexico City or Sandton in Johannesburg.
“The trend is to move from small properties embedded in city areas crisscrossed by streets and small public squares to projects that absorb much of this public tissue of streets and squares. This privatizes and de-urbanizes city space. I examine a lot of this in great detail in my Cities in a World Economy book,” she adds.
“We are way beyond gentrification. It is a much deeper and foundational project. Our cities will, in good part, become two cities: one for the privileged (and we will see more green space in these areas) and the other for the poor who have no gated community to go to,” she says.
Private corporate capital as drivers
“Urban ‘gigantism’ is further strengthened and enabled by the privatization and deregulation that took off in the 1990s across much of the world, and have continued since then with only a few interruptions,” she observes.
“The overall effect has been a reduction in public buildings and an escalation in the amount of private ownership. This brings with it a reduction in the texture and scale of spaces previously accessible to the public—a space that was more than just public buildings. Where before there was a government office building handling the regulations and oversight of this or that public economic sector, now there might be a corporate headquarters, a luxury apartment building, or a mall.”
The size and scale of what Sassen refers to as “direct investment in cities” is tremendous. “Let me give you some numbers for the top destinations of total (both national and foreign) investments in buying buildings and constructing buildings (and excluding investment into the developing of new sites, as distinct from buildings). The best estimates for this past year—from mid 2013 to mid 2014— puts New York as number one with $55 billion, London second at $47 billion, Tokyo at $35 billion, Los Angeles at $33 billion, and on and on.
“If you only take foreign investment, the main recipient is London. The Qatari Royals now own more of London than the Queen of England. The next key destinations are New York, Paris, Shanghai, Sydney, Los Angeles.
“There are several sources for these numbers, and they are likely not perfect, but they are good numbers. The sources include Oxford Analytica, the World Economic Forum and several other such. The easiest organization of these numbers is provided by Cushman and Wakefield, their capital markets research unit.
“When you consider the rapid growth in these diverse investments, you can see that gated communities might be the smaller proportion. The other major investment types are office buildings, retail, hotels, and high-rise apartment buildings, such as your new 117-storey project, ‘World One Tower’ in Mumbai...rising above all else. This is Indian money, not foreign,” she says.
What about India?
Sassen says she has examined data on Indians buying land abroad, as well as on India as a recipient of foreign capital in exchange for land. “I remember that by 2008, an important year because it was right after the (financial) crisis, and food prices were rising sharply, that Indian companies were acquiring quite a bit of foreign land—more than nine times the size of Delhi— and that India was among the top 10 countries buying land abroad. I gather you are also losing much agricultural land to real estate development in India,” she notices.
“From the data I have seen, it seems that much of the investment in urban properties in India comes from Indian firms. You do have a vast concentration of capital in your country, many very wealthy families and companies. This is also the case in the US, even though there is more foreign investment now, especially in the major cities. There are firms from the US, the UK, Austria, and Germany that are buying urban land in India. Mumbai and Bangalore (now Bengaluru) appear as the main destinations in India, ranking somewhere in the middle of the distribution of the top 100 cities receiving investments in urban properties,” she says.
New rules of engagement
One of the immediate implications of cities as being the new frontiers is that “there are no clear rules of the game. Different actors (firms, immigrants, foreign professionals) are moving in, it is too diverse, too many different countries are represented, etc. These actors come from multiple diverse settings.
“Chinese investors are not the same as British investors, and these in turn are not the same as Dutch or Kazakhstani investors. Similarly, those making new, modest, neighbourhood economies are also diverse: Jamaicans are not the same as Bangladeshi, and so on. Nor are the long-time residents and old leading firms the same as the neighbourhood enterprises or as the new foreign moguls investing in global cities,” she says.
For Sassen, “the notion of increasingly privatized urban space is deeply disturbing from a longer historical perspective. Addressing these issues is a collective project. It will take enormously determined leaders and citizens to fight on diverse fronts: ownership, fighting for public space for the poor and modest, the environmental question. It is not a single struggle, it is many.
“And one key issue that I have raised many times in my work is that the city is one of the spaces where those without power get to make a history, an economy (think of the neighbourhood economies immigrants make in their communities), a culture... In many other types of spaces, powerlessness becomes elementary, and no history is made. Examples of the latter are today’s militarized plantations, or today’s fully controlled so-called office parks. These are some of the issues my project on ‘Who Owns the City?’ is dealing with...it includes legal scholars interested in the privatizing of urban land. We are preparing it for the big 2016 UN Habitat meeting...a sort of rethinking of the Charter of Athens, a historic urban planning document,” she says.
“Under these conditions, the work of making the public and the political in urban space becomes even more critical. There are multiple actors and multiple perspectives—that of the citizen, the foreign investor, the immigrant entrepreneur, the old oligarchy, the grandmother, professional men and women, and many more.
“Let me illustrate my point with one type of actor—major developers. The challenge here is how to contain or govern major developers, both local and foreign, who consider urban space a commodity, a good to be bought and traded. City residents, no matter where they live, should have a voice when major developments in a city centre absorb what was once public space, streets, urban tissue, into a privately built and owned mega-building.”
Sassen’s words have a personal resonance. In India, many of those reading this paper may not spend even 10% of their time inhabiting public spaces: for example, private transport takes us to private establishments for work, leisure or even medical needs—and we live in a private gated community.
Yet the most coveted holiday destinations for affluent Indians are cities such as London, Singapore and New York, where this ratio is almost reversed—whether it is by using public transport, or visiting public museums, public parks and open spaces, and street-side retail, rather than shopping malls.
While Sassen is right to emphasize the vitality of public spaces, perhaps the critical question to answer is how to get the two most extremes of society to interact with each other, beyond a transactional relationship, such that they are willing to inhabit the same space. Without altering consumer preferences, it will be difficult to influence the direction of market forces.
This is the third in a six-part series.